Asjad Naqvi

Temperature shocks transmit unevenly across consumer prices, with adjustment extending into services and unfolding over several months. This paper combines gridded ERA5-Land temperature data with 17 Harmonised Indices of Consumer Prices in 34 European countries over 2000-2025. Monthly local projections trace price-level responses to country-specific maximumtemperature anomalies over 24 months. Headline prices and services respond gradually, reaching 0.157% and 0.122% at month 20 for a one-country-standard-deviation shock. Larger late-horizon responses appear in alcoholic beverages, tobacco, and narcotics and in personal care, social protection, and miscellaneous goods and services. Several delayed positive responses persist across seven lag-history specifications. The patterns are consistent with temperature-induced supply pressures transmitted through sectors with heterogeneous price adjustment. These findings connect the supply effects of temperature to the literature on sectoral price rigidity and inform the assessment of climate-related inflation risks.

In Europe, water security is increasingly becoming both a supply chain issue and a local resource concern. We map blue-water use embodied in trade across 303 regions linked to EU demand by combining a NUTS-2 environmentally extended input-output framework with WaterGAP consumption estimates and Aqueduct water stress indicators. Approximately 90% of the water embodied in EU consumption originates outside the consuming region, and about half crosses NUTS-2 borders within Europe. Supply is highly concentrated: 12 regions account for roughly half of intra-EU virtual-water exports, with irrigated agriculture driving most flows. Overlaying export intensity with regional stress reveals 25 bottleneck regions, concentrated in Mediterranean Europe, that are both major suppliers and highly water stressed. These dependencies expose consumers across the Single Market to drought-sensitive production shocks. Current EU water, agricultural and market governance does not systematically manage this concentration-stress overlap.

We estimate a source-specific Quadratic Almost Ideal Demand System (QUAIDS) on ADB multi-regional input-output (MRIO) data covering 62 countries and 35 sectors, treating each country--sector unit as allocating expenditure across five source regions. The framework allows non-homothetic demand and asymmetric substitution across suppliers. Demand responses are strongly heterogeneous: expenditure elasticities depart from unity (0.916--1.146) and own-price elasticities range from near-unitary (Europe and Central Asia, -1.00) to highly elastic (China, -2.16), so uniform tariffs hit suppliers unevenly. In a benchmark 20% U.S.-linked tariff with 80% pass-through, nominal expenditure switching and real volume switching diverge, since tariff-inclusive prices reallocate spending shares and physical quantities differently. Expenditure-weighted global equivalent-variation losses reach about 3.1% of baseline expenditure, concentrated in the tariff-imposing economy with smaller systematic spillovers. Sectoral incidence is largest in service-intensive activities rather than trade-exposed manufacturing, underscoring the role of demand structure in shaping tariff incidence.

Climate change disproportionately impacts capital and output in low- and middle-income countries (LMICs). Limited fiscal space and high dependence on capital good imports further curtail their ability to make timely climate-resilient investments. In this paper we present a demand-driven model that is supply-side constrained due to insufficient build up of production capacity. Calibrating the model to Fiji, we evaluate growth pathways for three climate futures – 2C, 3C, and 4C global warming by the end of the century. We evaluate the role of a public climate fund to enable partial recovery that is financed through four different schemes - debt-led recovery, higher tax on households, higher taxes on capitalists, and unconditional grants from the rest of the world. Recovery is possible in the 2C scenario, but the 3C and 4C scenarios increasingly face higher investment costs in the face of lower growth and saving rates. In the 4C scenario, even the most generous unconditional grants scheme fails to prevent the downward spiral of hitting capacity constraints despite an initial boost to output. These insights underscore the need for effective and equitable domestic climate policies and affordable finance and compensation to support sustainable development in vulnerable countries.

We assess to what extent municipalities with socioeconomically vulnerable populations are disproportionately exposed to particulate matter in Austria. Although air quality in Austria has improved over the last decades, thresholds for safe air quality are still exceeded in large parts of the country and disparities both across and within Austrian regions exist. Particulate matter accounts for the largest environmental health damages of all ambient air pollutants. We use municipality level data on particulate matter exposure from the European Environmental Agency and sociodemographic data from Statistics Austria for 2015. We find that foreign citizens are disproportionately exposed to higher levels of particulate matter in Austria. This finding is robust with regards to different controls, regional fixed effects, and different particulate matter exposure indicators. Exposure disparities by citizenship are stronger in urban areas, where the large majority of foreign citizens live. We also find that citizens with low educational attainment are exposed to higher levels of particulate matter. The latter disparities are stronger in rural areas, where the majority of people with low educational attainment live. The relationship between income and air pollution follows an inverted U-shape in most specifications. High turning points and wide Fieller confidence intervals, however, suggest that the relationship is positive for most of the distribution and insignificant or negative for very high incomes. Overall, we find evidence that socioeconomically vulnerable municipalities are exposed to higher levels of particulate matter.